The E.W. Scripps Company (NASDAQ:SSP) Q2 2024 Earnings Call Transcript

The E.W. Scripps Company (NASDAQ:SSP) Q2 2024 Earnings Call Transcript August 9, 2024

Operator: Good day, everyone. And thank you for standing by for the Scripps Q2 Earnings Call. At this time, all participants are on a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, today’s call is being recorded. I will now turn the call over to your hosts, Carolyn Micheli. Please go ahead.

Q – Carolyn Micheli: Thanks, Kevin. Good morning, everyone. Thanks for joining us for a discussion of The E.W. Scripps Company’s financial results and business strategies. You can visit scripps.com for more information and a link to the replay of this call. A reminder that our conference call and webcast include forward-looking statements based on management’s current outlook and actual results may differ materially. Factors that may cause them to differ are outlined in our SEC filings. We do not intend to update any forward-looking statements we make today. Included on this call will be a discussion of certain non-GAAP financial measures that are provided as supplements to assist management and the public in their analysis and valuation of the company.

These metrics are not formulated in accordance with GAAP and are not meant to replace GAAP financial measures and may differ from other companies’ uses or formulations. Included in our earnings release are the reconciliations of non-GAAP financial measures to the GAAP measures reported in our financial statement. We will hear first this morning from Scripps Chief Financial Officer, Jason Combs, who will share financial results, as well as color on the Scripps ad marketplaces. Then we’ll hear from President and CEO, Adam Symson. Chief Operating Officer, Lisa Knutson also is in the room. Here’s Jason.

Jason Combs: Good morning, everyone, and thank you for joining us. I’d like to start this morning with the best news of the quarter, probably the whole year, political advertising revenue. Once again, we’re raising our guidance for political after a record first half of the year, up 40% over the same period for 2020. Our full year guidance is also at a record level. Again this year, we will see broadcast television continuing to capture the lion’s share of political advertising dollars. Also exceeding our expectations and the performance of our peer companies are our national advertising upfront commitments. Adam will talk in more detail about political and the upfront in a moment, but first let’s cover the highlights from our Local Media second quarter results and some Q3 and full year guidance, and then Scripps Networks division results and guidance.

I will end by addressing our debt reduction plan. For the second quarter of 2024, Local Media division revenue was up nearly 4% from the year ago period, in line with guidance, as we brought in a record amount of second quarter political advertising revenue. The political revenue, which was $28 million, gained strength from early U.S. Senate spending in Montana and Ohio. Local distribution revenue was about flat over Q2 of 2023, as we had minimal pay TV contract renewals this year. Our virtual pay TV subscriber count rose by low double digits from a year ago quarter, and the overall pay TV subscribers were down mid-single digits, in line with our modeling and expectations. Second quarter, Local core advertising revenue was down about 7% from the prior year period.

Q&A Session

Core was impacted by some displacement due to our strong political advertising revenue, a tough comp to last year’s NBA finals, and a transition period as we moved away from a national rep firm. Local Media expenses were up only 2% from the prior year quarter, right in line with our guidance, even factoring in our new sports rights agreements with the NHL’s Vegas Golden Knights and the former Arizona Coyotes franchise. Local Media segment profit was $88 million, a 9% increase from Q2 of 2023. For the third quarter, we expect Local Media division revenue to be up about 20%. We expect Local core ad revenue to be down mid-single digits due to the influx of political advertising revenue. This displacement of core is expected to be partially offset by summer Olympics advertising revenue that is coming in 13% higher than our Tokyo Olympics revenue.

We expect Q3 Local Media expenses to be up in the low single-digit% range. Turning to the full year, we now expect our Local Media division political advertising revenue to come in between $270 million and $290 million. That is our second raise to guidance and would be a record level even at the lowest debt. We already had a record-setting second quarter and first half for political revenue. Now the entry of Kamala Harris into the Presidential race and the high level of fundraising for both Harris and Donald Trump is resulting in new dollars spent with us. In Montana and Ohio, U.S. Senate races also continue with heavy spending, and we have at least four states with reproductive rights issues on their ballots. Now I’d like to discuss Scripps Networks division second quarter results and third quarter revenues.

In the second quarter, Scripps Networks revenue was $209 million, down 9.7% from the year ago quarter. During Q2, we continued to feel the effects of last year’s soft upfront advertising season. However, we were pleased to deliver ad revenue for both scatter and rec response that was about flat relative to the prior year. Connected TV revenue was up 11% in the second quarter after backing out the programmatic advertising products we shut down. During the quarter, we were impacted by the same dynamics as many others on streaming, as Amazon and Netflix unloaded a large amount of inventory into the advertising marketplace at steeply discounted rates. We expect the market to absorb all of this inventory and ultimately for rates to rise. But until we move past that, we have lowered our expectations for connected TV revenue.

We have guided in May to CTV revenue in Networks being up about 30% for 2024, minus the impact of our programmatic products. Our new guidance is up about 10% from 2023 on that basis. Second quarter, Scripps Networks expenses were flat the prior year at $171 million, despite incremental sports spend, reflecting ongoing prudent expense management. Segment profit was $38 million. For the third quarter, we expect Scripps Networks division revenue to be down in the mid-single-digit range from last Q3, as we cycle past the impact of the 2023 up front, we do not yet see the benefit of the 2024 up front. Our expectation is that Networks expenses will be down in the low single-digit range in the third quarter and that we will realize an even greater decline in Q4.

We’ve been working diligently to keep down company expenses. As you can see from our second quarter results and third quarter outlook. Turning to the segment labeled Other, in the second quarter, we reported a loss of $9 million. Shared services and corporate expenses for Q2 were $21.7 million. For the third quarter, we expect the expense to again fall in the $21 million range. We’re planning for CapEx to fall somewhat below our guidance of $70 million to $80 million due to our broader expense management efforts. Our new expectation is $65 million to $70 million. For the second quarter, the loss attributable to shareholders of Scripps was $13 million or $0.15 per share. Just a reminder that the preferred stock dividend still has a negative impact on earnings per share, even when we don’t pay it.

This quarter, it reduced EPS by $0.17. At June 30th, cash and cash equivalents totaled $27 million. Our net debt at quarter end was $2.9 billion. As we’ve discussed, we’ve laid out an aggressive plan for debt pay down and leverage reduction this year, and we’re moving well through the execution of this plan. Our plan has three key components, asset sales, use of incremental cash flow and evaluating the best possible timing for the refinancing of our upcoming maturities. We continue to move through our process to sell the Bounce TV network, as well as to divest us of some real estate holdings. We remain on track to share more details on the divestiture process within the next several months. In terms of cash use, we plan to apply proceeds from our robust political ad revenue and other incremental cash flow to debt pay down.

As I hope is clear by now, paying down debt is our highest capital allocation priority and we’re putting our energy around significant pay down by year end to reach a leverage ratio in the low-to-mid 5 times range. And now, here’s Adam.

Adam Symson: Thanks, Jason. Good morning, and thanks for being with us. Today, Scripps is moving through another meaningful intersection in our long history. We’re very near-term focused on paying down debt and capturing new efficiencies that give our business greater sustainability. At the same time, our eyes are fixed on a future where we channel our powerful ability to create connection into driving company growth. At this moment, broadcast television is the tailwind propelling us forward. We see our broadcast strength in the ongoing intake of tremendous political advertising dollars, in our ability to drive huge audiences to Local and National Sports, and in the massive viewership and ad spending on the Olympics, reaching records out of Paris this year.

I’d like to talk in more detail about the areas of politics and sports, and how they create value for us. The 2024 Presidential Election recently took an unprecedented turn with Joe Biden’s decision not to run again. The entry of Kamala Harris into the race, combined with the wind down of Donald Trump’s trials, appears to be translating into a higher spend of the Presidential race than anyone had anticipated. While still early, this appears to be very good news for Scripps. We are already receiving ad bookings from both campaigns and related political action committees. In Montana, Scripps is seeing the full effect of its number one and number two ranked Local television stations in the race between Democratic incumbent U.S. Senator Jon Tester and his Republican challenger Tim Sheehy.

And in Ohio, where Democratic Senator Sherrod Brown is defending his seat against Republican Bernie Moreno, our big ABC affiliates in Cleveland and Cincinnati are seeing large spends. The Nevada, Michigan, and Arizona U.S. Senate races are also toss-ups, driving spending in our markets, as are the contested ballot issues. Ad Impact projects Local broadcasters will receive at least half of this year’s election spending, demonstrating the ongoing influence and reach of Local news as a brand-safe vehicle for political advertisers. As you know, record political revenue comes down to where you have stations during any given election year and this year, Scripps is benefiting from exactly the right footprint. Scripps’ foresight and subsequent bold moves into live sports were always about leaning into the unparalleled reach of broadcast television, and we’re glad to see the leagues and teams continue to recognize the critical role we play, including the recent NBA deal that will bring more live sports to Scripps’ Local NBC and ABC stations than ever.

It’s clear to us that prudent investment in live sports pays off, with evidence we’re seeing both in Local Media and at our Networks. First in Local, last month we announced our newest major partnership with the NHL’s Florida Panthers, fresh off their Stanley Cup title win. The Panthers play in Fort Lauderdale, with a dedicated fan base that extends from Miami all the way north through Palm Beach County. This provides Scripps the opportunity to broadcast in three TV markets, Miami, West Palm Beach and Fort Myers. We also will retain the partnership next season with the Arizona Coyotes, the former Arizona Coyotes, at their new home in Salt Lake City. And we continue to see great success with the Vegas Golden Knights, who have a fan base reaching across multiple western states and Scripps markets.

I already shared how important Montana is to our political performance this year. What you should also know is the key role our rights partnership with the NCAA Big Sky Conference is playing in maximizing this opportunity. With no professional sports in the state, it’s all about Montana and Montana State football. And this season, 13 of our 18 Big Sky Conference football games will air before Election Day. Those games, the pre- and post-game shows, and all of the sports-related adjacent programming will capture a significant percentage of our political yield. On the national network side, our strategy to leverage our leadership in and commitment to professional women’s sports is paying off for our whole portfolio in this year’s upfront.

Our Friday and Saturday night franchise telecasts of the WNBA and the National Women’s Soccer League have new, big brands advertising with us for the first time, more than two dozen so far. Our upfront strategy drives their commitment to Scripps across time periods, Networks and platforms. In fact, the impact of sports has helped drive our upfront results to low single-digit increases in volume over last year and compares very favorably to what we’re hearing about similar-sized media companies. Our successful upfront sales have been buoyed by record viewership of the WNBA on ION and elsewhere. On ION, three games have surpassed 1 million viewers so far this season. Our revenue for the WNBA so far this year is up 85% over 2023. Just halfway through our season, we’re seeing the Summer Olympics add more fuel to fans’ passion for both women’s basketball and soccer, and we expect that enthusiasm to carry over into our ratings when the leagues return to ION after the Olympics break.

Between our Local footprint and Networks portfolio, Scripps is the best position to create new value from live sports. For Scripps, acquiring ION continues to be an entry point to new growth through women’s sports and by allowing us to create a national network’s portfolio that has nearly generated $900 million in 2023 revenue, including almost $100 million in connected TV revenue, while diversifying us away from the volatility of traditional pay TV. Upon the divestiture of Bounce, we’ll examine our expense structure and resource allocation in the Networks division in pursuit of additional efficiencies within that portfolio to continuously improve financial operating performance. Scripps’ strength lies in creating connection. We connect consumers to one another and to us through live sports.

We connect advertisers to their customers with consumer insights and through new technologies, and our journalism connects people to their neighborhoods and communities with important information that improves their lives. Connection is not just a mission of ours at this company, it’s a business imperative. These kinds of connections drive our business every day. The transformation of our company for better operating performance is far from over and once we emerge from a period of debt paydown and significant leverage reduction, we intend to further catalyze value for our shareholders through the concepts of connection with our sports partnerships, new advertising and consumer media technologies, and by continuing our deep commitment to our news and entertainment audiences and our local communities.

In pursuing that work, enterprise value is the measure of our success. And now, Operator, we’re ready for your questions.

Operator: Thank you. [Operator Instructions] And we’ll go to the line of Dan Kurnos of Benchmark. Please go ahead. Okay, sir, your line is open now.

Adam Symson: Dan?

Jason Combs: Dan?

Dan Kurnos: Hey. Can you guys hear me?

Operator: Yes.

Adam Symson: Yeah.

Dan Kurnos: Okay. Sorry, I don’t know what happened there. Apologies for that. Quick couple questions, more just, I guess, we’ll call them housekeeping. Jason, can you just talk a little bit more about core trends and if you want to strip out obviously the tough comp with the Nuggets last year in 2Q and then into 3Q, and I know it’s hard to figure out what displacement actually is doing or impacting. That would be helpful. And then on the political front, obviously, super strong guide from you guys. Your prepared remarks, Adam, kind of imply that you’re not baking in sort of full spend from Presidential, or I just want to be clear on how you’re thinking about the new guide and relative to the fundraising we’ve seen sort of what the potential range of outcomes is?

Adam Symson: I’ll take the political first, Dan. It’s Adam. Yeah. I mean, obviously, we’ve moved our guide up pretty aggressively. I think that accommodates our view relative to what we’ve seen with Kamala Harris’ impact on down ballot races as well. I think there are a number of states where the Senate races have gone from leaning Republican to now being toss ups. That’s benefited us. We certainly see the continued opportunity with reproductive rights on the ballot. As we think about the Presidential race in and of itself, look, I mean, I think that we are seeing a level of energy around this campaign cycle that hadn’t been baked into our earlier forecasts and now it’s a question of how they allocate their spend.

We’ve clearly set out an expectation that we think this year will be a record for us. We saw a record amount of spending in second quarter and a record amount of spending in the first half. And frankly, that was against tough Presidential comps when we thought about Michael Bloomberg and his early spending in the cycle one cycle ago. So, so far, so good. I mean, I think there’s obviously continued upside. But the question will be, how do we maximize this opportunity and we will pull out all the stops in order to make sure that we’re able to place all the revenue on our on our broadcast stations.

Lisa Knutson: Hey, Dan. It’s Lisa. Related to core and Q2, so as we reported, revenue was down about 7%. Some of that was due to displacement. And when we think about displacement, we think of anywhere from 10% to 20% in a particular market. As Jason and Adam indicated, both Montana and Ohio are very, very tight. We continue to see huge upside there. So that’s driving a lot of it. We also saw some category softness in Q2. I think when we did our Q1 call, we were seeing our top categories sort of in the positive. Both for services and automotive, we finished the quarter slightly down and we’re seeing a little bit of that continue into Q3. So you’re seeing some of that in our guide. I think the big story, really, as Jason and Adam both pointed out, is political. And we are — we saw record political in the first half of the year, including in Q2 and I think we’ll see record political spending in Q3 as well, and obviously, for the year.

Dan Kurnos: Got it. Thank you. And good to hear from you, Lisa. One more, if I can sneak one in. just — Adam, just on Networks and ION, I mean, appreciate the color from the up front. Obviously, we heard some really positive things even around linear pricing for live sports and it seems like the upfront actually came in a lot better than people thought from sort of a combined linear digital perspective. And so as we move forward and appreciate your cost efficiency commentary, just trying to understand how we should be thinking about from Q4 and then onwards, forgetting what happens with the macro because no one can control that, how we should be thinking about the portfolio’s potential to return to growth and subsequently, like, how fast you can get margins back to where I know you had sort of envisioned them being when you made the acquisition?

Adam Symson: Yeah. Thanks, Dan. Let me first start with a little bit more commentary on the upfront and then get to your question about how it will impact, I think, the Networks portfolio. I think ultimately this year’s upfront results have essentially validated our sports strategy and it really is very apparent. When you think about overall, we’re going to be up low-single digits in volume driven by sports and CTV. And so I don’t know that I think everybody in the industry will say that the upfront was a good story, but I think if you have the right assets driven by sports and if you have the right CTV strategy, we’re going to see that positive story. For us, CTV upfront right now and we’re not completely done, is pacing about 60% up over last year’s upfront and sports we’re looking at about 10 times last year’s volume.

Relative to rates, I think rates are going to be pretty consistent with last year. Sports rates are going to be up in the mid-single digits over last year. So I think, again, a really, really positive story and a validation of our strategy. The beautiful part of this, though sports make up a small percentage of our programming, our strategy was always about leveraging women’s sports in order to impact the overall eye on brand and our entire Networks portfolio. And so while the rate is going to be different, we’ve brought in all of these new advertisers for sports and now we’re driving their spend not only in those time periods, but well across those time periods on ION, across our Networks, onto our different networks, and across platforms onto CTV and I think that’s the big story for us out of the upfront.

Relative to getting the Networks back to where we want them to be, I think over the course of the next year, you’re going to see us continue to optimize the Networks resource allocation and expense strategy in order to continuously improve the margins for the business. I think we obviously recognize that there’s a gap between the revenue when we — where we thought the business was going and then since because of the macroeconomic conditions where the business has been and that calls for us, obviously, to adjust the expense structure to meet the revenue so that we can get the business back to the margin we expect it to be in and I think you’ll see us act prudently, but urgently in order to do that.

Jason Combs: And just to maybe add on that a little bit, one thing that wasn’t lost in the script, you’ve already seen us flat expenses in Q2, guided to download singles in Q3 and we foreshadowed to Q4 that you should expect to be down by more in Q4 than we are in Q3. So you’re also starting to see that come through in our forward-looking guidance.

Dan Kurnos: Got it. That’s really helpful color. Thanks, everybody. I appreciate it.

Adam Symson: Thanks, Dan.

Operator: And next we’ll go to the line of Steven Cahall of Wells Fargo. Please go ahead.

Steven Cahall: Thanks. So, Adam, you talked a lot about sports. We’ve seen Nexstar reprogram the CW towards a much more sports-centric platform. I was wondering what your view is of how much more sports you could bring to ION, given some of the success that you’re seeing, and if you think that there’s a point at which it makes sense to move that from a must-carry network to a retrans-driven network as you think about the cost of sports. And then I know you talked a little bit about prudent sports investments on the Local side. I was just wondering how much they’re contributing to core at this point and what we think that’ll do going forward? And then, Jason, so thanks for touching on some of the deleveraging efforts.

Any update on the timing around Bounce? It sounds like that’s going well. Can you mention whether you have multiple bidders or what stage you’re in? And then, finally, as it relates to other assets like towers and real estate, is there any kind of rough way for us to think about quantum or timing for those types of divestitures? Thank you.

Adam Symson: Hey, Steven. Thanks for the question. Yeah. Look, I think, we are prudently looking at adding additional sports, but the mix is key. The answer is not to turn ION into a sports station. The answer is for us to continue to look at ways to add sports in which it’s an accretive move to our programming strategy. I have to tell you, even in the upfront, we get a lot of benefit from the predictability and from the value we bring to the marketplace with our existing programming strategy. And entertainment is a really, really important part of our strategy. So it’s not about moving all in on sports. It’s about recognizing that general entertainment today requires you to really reach a variety of different audiences.

And bringing sports, particularly women’s sports, to ION and rebranding ION about that is lowering the average age of the ION viewer. It is making it more multicultural, not only in those time periods, but also outside of those time periods. So the strategy is really working. But I would say we would look to continue to identify opportunities to bring on additional sports if they are on-brand and if the economics make sense. You asked about moving to retrans versus must-carry, and that’s certainly not in our plan right now. And so you’re probably wondering, well, how can you afford to continue to add sports? And I have to say, that all comes down to ION’s premise or the proposition ION brings to the negotiating table when we talk to leagues and teams.

At the end of the day, we believe ION’s platform as a ubiquitously deployed platform available on over-the-air, cable, satellite and connected TV make it an unparalleled platform where leagues recognize that we are bringing something to the table in addition to a check for rights and that’s why I think we continue to have good luck with the relationships we have. I think when we talk to the folks at the NWSL and the WNBA, they appreciate our commitment to women’s sports. They appreciate the fact that we’ve put a franchise Knight on the table for both, which has helped fans of women’s sports find women’s sports, because otherwise on other networks, it’s sort of just jammed in around men’s sports. And we’ve committed to creating studio shows, pre-shows, halftime shows, post-game shows, that tell the stories of these athletes and develop the characters in the leagues in a way that nobody else has committed to.

And so I think they see the value of our reach and the value of our partnership well beyond just a check that we can cash and that’s why we’re able to take, I think, a prudent approach to expense allocation towards live sports programming.

Jason Combs: And Steve, on your Bounce questions, we can’t really say a lot since we’re in the middle of the process. I would say it’s moving along well and it’s a competitive process and you should hear more from us in the next couple of months. From a real estate perspective, if you’re looking for sort of a quantum there, I would say, we’re looking to generate between $1,500 million in cash proceeds from those activities.

Steven Cahall: Thank you.

Adam Symson: Thanks, Steve.

Carolyn Micheli: Kevin, anyone else in the queue?

Operator: [Operator Instructions]

Carolyn Micheli: All right, Kevin, I think we’ll wrap it up, assuming there are no other questions. Thanks, everyone, for joining us today.

Operator: Actually…

Carolyn Micheli: Oh! Sorry.

Operator: Actually, we do have one. Craig Huber of Huber Research.

Carolyn Micheli: Okay. Great. We were wondering where Craig was.

Adam Symson: Hey, Craig. Good morning.

Craig Huber: Hi. Most of us aren’t used to this one and zero to get in the queue and stuff. All right. A few questions. I’ll just do them one at a time just to make your guys’ life easier. Adam, what percent of the viewers on your TV stations nowadays are coming from over-the-air? Where’s that number at now? Where do you think it was roughly five years ago?

Adam Symson: I think it’s grown to be somewhere between 20% and 30%, depending on the market. In some cases, it’s even higher. Market topography and market geography have a lot to do with that. Markets like in Arizona, it’s higher. In markets like West Palm, it’s lower. Again, that’s based on geography and topography and probably also demographics. When we think about the Networks, also, I’d say between 30% and 40% of the Networks audience. Our ION audience, is probably coming from over-the-air. But other networks, it’s much higher. Bounce, for example, significantly higher. And then you think about some of the other multicast networks. Their distribution is primarily over-the-air and the revenue they’re generating is primarily from over-the-air viewing.

All that said, I don’t necessarily believe that the currency or the measurement is accurately reflecting the value that we’re getting from the over-the-air audiences, because we can definitely see a delta, especially in the direct response marketplace, which is obviously dependent on viewing, and the efficacy of our Networks and Local markets with direct response compared to the ratings. And we continue to work with all of the ratings platforms to ensure that they’re properly measuring the over-the-air marketplace. But we feel pretty darn good about the percentage of the marketplace at this point that continues to grow.

Craig Huber: And where do you think, Adam, that number was roughly five years ago, and while I have you — you have this big promotion effort you guys have been running through your Other segment here and stuff. I mean, it sounds like you’re, I’d be curious about the funding level of your money you put into that this year versus last year. I mean, you must get, it feels like you’re getting a pretty good bang for your buck there, right?

Adam Symson: Yeah. I mean, I would say several years ago, when we were really beginning our focus on over-the-air distribution as a platform, it was below 20%. I would tell you, if you go back even further than that, at the outset of cord cutting, it was about 7%. I think Forbes just did an interesting article and referenced the fact that over-the-air broadcasting is probably the fastest growing form of television viewing, linear television viewing as cable is in decline and CTV obviously reaches a certain level of ubiquity. We’re seeing a lot of people identifying the opportunity to add television for free to their bundle and that continues to be the premise of our view on over-the-air growth.

Craig Huber: And what about your promotion efforts that go to that Other segment, that small segment you have? How’s those dollars this year being spent versus last year? Is it about the same or what?

Adam Symson: Yeah. I mean, overall this year, I think most of the revenue or most of the expense that you see tied to our promotion of over-the-air is being run through our development and growth of the Tableau business in which we’re also generating revenue. We’ve sort of shifted away from being the industry’s advocate to really trying to advocate for over-the-air through the use of Tableau because there’s a direct consumer connection that we get. And this quarter, Tableau hit its sales targets, and in fact, we’ve been able to lower our customer acquisition costs, and so we’ll continue to use that as a prudent way to grow the over-the-air marketplace. We also do pretty routinely use our own promo inventory, not only to remind consumers that they need to re-scan in order to identify new opportunities, not only ours, but others in the marketplace.

And frankly, I’m at the point now where I’m starting to have really positive conversations with some of my peers. They are themselves also recognizing the need for us to support over-the-air television and we think that will inure to our benefit disproportionately as well.

Craig Huber: Okay. I appreciate that. If I could ask you a little bit more on the Scripps Networks. I’ll just go back to last quarter for a second just to let you understand this. Your guidance for Scripps Networks was down mid-single digits for revenue in the quarter. Numbers came in down 9.7% against the revenues. Was that all because — maybe I missed this, is this all because the month of June came in significantly worse than expected? What categories would you hone in on there as being the problems?

Lisa Knutson: Hey, Craig. It’s Lisa. On the network side, the story was all CTV. So as Jason mentioned in his remarks, both Amazon and Netflix really dumped a ton of inventory into the marketplace at steeply discounted rates. And not just Scripps, but lots of others in the CTV space had to react to that. And so it was — I think Amazon launched ads in late March, early April and we ended up seeing the effect of that throughout the quarter. That was really, I think, in some ways, unexpected.

Craig Huber: Okay. And you think you have a much better grasp on that dynamic now with your similar down mid-single-digit outlook for the current quarter?

Lisa Knutson: Yeah.

Craig Huber: Do you feel fairly confident about that down mid-single-digit this time around, this third quarter?

Lisa Knutson: Yeah. Oh! Yeah. Yeah.

Craig Huber: All right. And then talk a little bit further about auto advertising at your TV stations, if you would, please. I think you said it was down slightly. I know things are moving around here for the current quarter…

Lisa Knutson: Yeah.

Craig Huber: … but what’s your outlook for auto, please?

Lisa Knutson: Well, in — I — my comments were that second quarter was down slightly. So auto was down about 2%. I think the biggest issue in Q2 were — which was a turn from previous quarters, where Local dealers were down about 8%. And I think that’s also our best opportunity to grow in the future quarters is that dealer group, as they have to move auto, certainly 2024s off the lot and on to make room for the 2025s. In terms of — so automotive is trending, I would say, in about that range. We’re seeing some — as Jason mentioned, we’re seeing some positive momentum out of Olympic which is helping really multiple categories, but auto being one of the largest categories, certainly helping that. But I think we’ll continue to see that slightly down in the third quarter.

Craig Huber: My last question — I’m sorry, but it’s my last question on political. I mean, obviously, things have changed quite a bit out there as you guys went through several different ways about on the political side about how strong you think it’s going to be this year and stuff. Is there a chance at all that this may play out again like what happened in 2022, where early indications were political was going to be very hot, very strong for the full year and then as we got deeper into the year, some of the races ended up not being as competitive and money shifted and the TV station group did not benefit as — in general, the whole industry did not benefit as much as people thought earlier in the year? Is it possible you might see that, unfortunately, here in 2024?

Adam Symson: Absolutely not. In fact, I think it’s quite the opposite scenario. And I think I’ve said to all the analysts and investors that, we learned a lesson the last time around. We would not be putting out this guide if we were not competent in this guide.

Craig Huber: Okay. Great. Thank you very much.

Adam Symson: Thanks, Craig.

Operator: Okay. At this time, we have no further questions in queue.

Carolyn Micheli: Okay. Thanks, Kevin. We’ll wind up now. Thanks, everybody, for your time today. Have a good weekend.

Operator: And thank you. Ladies and gentlemen, that does conclude your conference. You may now disconnect. Have a good day.